Fraser Papers Inc.

Fraser Papers Inc.

May 25, 2010 10:06 ET

Fraser Papers Signs Agreement to Sell New Hampshire Paper Mill

TORONTO, ONTARIO--(Marketwire - May 25, 2010) - Fraser Papers Inc. (together with its subsidiaries, "Fraser Papers" or the "Company") announced that its subsidiary Fraser N.H. LLC, has reached an agreement to sell substantially all of its assets to an investment fund managed by MerchantBanc, LLC, of Manchester, NH. Financial terms of the transaction were not disclosed.

The paper mill in Gorham, New Hampshire currently operates three paper machines and produced 80,000 tons of uncoated freesheet papers and 37,000 tons of towel products in 2009. The transaction is expected to close in late July and is subject to approval of the Ontario Superior Court of Justice (Commercial List) and the United States Bankruptcy Court for the District of Delaware.

Fraser Papers remains under creditor protection pursuant to the provisions of the Companies' Creditors Arrangement Act ("CCAA"), with its stay of proceedings having been extended by the court to July 9, 2010.

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Note: This press release contains forward-looking information and forward-looking statements within the meaning of Canadian provincial securities laws. These forward-looking statements include, among others, statements with respect to the sale of the Company's paper mill in Gorham, New Hampshire, including the anticipated closing date and Court approval, and the Company's CCAA status. The words "expect", "subject", variations of those words and other words and expressions which may be predictions of or indicate future events and trends and which do not relate to historical matters identify forward-looking statements. Reliance should not be placed on forward-looking statements because they involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of the Company to differ materially from anticipated future results, performance or achievement expressed or implied by such forward-looking statements. Factors that could cause actual results of the sale of the New Hampshire paper mill to differ materially from those set forth in the forward-looking statements include, the inability to clear any closing conditions which exist in the agreement reached between Fraser Papers and the purchaser, unforeseen administrative, legal, or transactional issues and other risks detailed from time to time in the documents filed by the Company with the securities regulators in Canada. In addition, the Company is currently operating under creditor protection laws in Canada and the United States. Many of the Company's plans are subject to the review of commercial courts in Canada and the United States. The Company cannot anticipate when such plans will be the subject of consideration by the commercial courts or, if they are, what impact that consideration will have on the plans or intentions of the Company. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

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